The High Court · 2025

Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to stay of all further proceedings in pursuance of the award and recovery certificate passed in AAiCFlNo. 135 of 20 19, on the file of the Hon'ble Deputy Registrar of Chits Warangal District at Warangal, dated 13-11-2020, including execution proceedings in E.P. No. 77 o'f 2022, on the file of Hon'ble I Additional Junior Civil Judge at Hanumakonda. lA NO: 2 OF 2024 Between: Hamsika Chit Funds Sri. S. Mahender S/ o Branch Warangal. AND Pvt. Ltd., Kazipet Branch, Represented by Foreman, Lingamurthy, aged 45 years, Kajipe a Warangal, Kazipet 1 Jogu Venkatamma, Wo. Yakaiah, Age Employee, R/o. H. No 5-3/2, Bommera, Warangal [)istrict. 47 Years, Occ. Government Footwear fihop at Chelpur Jn, RESPONDENT/PETITIONER tlO.1 in lA NO.1/2024 ...PETIT|ON E R/OPPONENT No.3.

2. The Hon'ble Deputy Registrar of Chits and District Registrar, Warangal, Warangal Cristrict

3. Kurapati Venkateshwarlu, S/o. Rajamouli, Age.45 Years, Occ. Business, R/o. H. No. 30-.1 -'127, Main Road, Madikonda, Kazipet, Warargal District.

4. Neelishetty Sreenu Babu, S/o. Balachennaiah, Ag,1. 54 Years, Occ. Government Employee, R/ o. H. No. 2-6414, Ayodyapuram Road, Madikonda, Warangal District. 5- Radarapu Komuraiah, S/ o. Yellaiah, Age. 57 Years,, Occ. Government Employee, tl/o H. No. 29-5-48, Hasanparthy, Warangat t)istrict

6. Sambara.; Sharath Babu, S/o. Madhava Rao, Agr:. 54 years, Occ. Government Employee R/o. H. No. 1-123, Main Road, l'Vladikonda, Kazipet, Warangal Distrrct (R.Nos 3 to 6 are not necessary parties to this petition) ...RESPONDENTS/R.NOs 2 to 6 in lANO.1l2O24 Petition under Section 151 CPC praying that in the crrcumstances stated in the affidavit filed in support of the petition, the High Courl may be pleased to vacate the stay order dated 16-2-2024 passed in lA NO. 1 ot 2024 in CRp No. 478 of 2024 . Counsel for the Petitioner :SRI. K VENUMADHAV Gounsel for the Respondents: SRI N. AMARNATH The Court made the following: ORDER ,a:i: HON'BLE SRIIUSTICE LAXMI NARAYANA ALISHETTY CIVIL REVISION PETITION NO.478 OE 2024 ORDER: The Civil Revision Petition is filed assaiiing the order, date<I

73.11.2020, passecl by the respondent No.2-Deputy Registrar of Chits, Warangal in AA/CF/No.-135 of 2019, whereby and where under the application filed by the respondet.rt No.1-Chit Fund Company was allon,ed

2. Heard Sri K.Vcnumadhal,, learnetl counsel for the petitioner/ opponent No.3 and Sri N.Amarnath, learned counsel for respondent No.1/Chit Fund Company

3. Brief facts relevant for adjudication o[ the Present Civil Revision Petition are that respondent No.1-Chit Fund Company has filed an application under Section 64 of the Chit Fund Act, 1982 for recovery of Rs.9,16,980/- including the interest and costs against the petitioncr and respondent Nos.3 to 6. Responclent No.3 is the subscliber of the respondent No.1-Chit Fund Company for a value of Rs.10,00,000/- and has participated in the chit auction and became the successful bidder having agreed to forego Rs.4,00,000/- and received total prized amount of-84.6,00,000 /-. The petitioner herein and the respondent Nos.4 to 6 stood as guarantors ancl executed the agreement o{ guarantec and 2 demand note in favour of respondent No'1-chit fund company for .,i.- proper piryment of the future subscriptions by trt' respondent No'1' l-Iowever, r'esponclent No.3 committed default in Payment of instalmerts frorn 10.02.2018 onwards and heuce, th':l respondent No'1- Chit Fund Company file,-{ an arbitration case Lrt,ir:rre the responclent No.2

4. Thr: respondent No.2 passecl the irnpugnecl order datcd 13 '17 '2020 holding that r.espondent No.1-Chit Fund Companl' is entitled to lecover an amount of Rs.9,16,980/- n'ith intclest @ 189'" p a,-, on the principal amount of Rs.7,75,830 /'fuom the clate of filing of p'elition till the date of realization frorn thc oPponents i.e., petitioner and respondent Nos 3 to 6 herein, jointly and severallv. Aggrieved by thc iLr-Lpugned order dated

13.71.2020, thc petitioner herein, who stood as o rc of the guarantors, filed the presellt revision petition.

5. Learned counsel for petitioner submits that tl-re rcspondent No'z has pass,rd anex parte impugned orcler without gir ir-rg an opportunity to the petitioner and without following the procerlr.rle enunciated under Rule 50 of A.P.Chit Fund Rules, 2008; tl-rat ths ?rrrr l.tr.tdent without following the procedure with regard to the mode r:f service of summons i I I I ,,1, passed the impugned order and finally, prayed to allow the revision by setting aside the impugned order

6. Per contrn, Iearned counsel for respondent No.1-Chit Fund Company woulcl submit that the respondcnt No.2, on due consideration of the oral documentary evidence placed on record, has passed the order and the petitioner failed to makc out any case to interfere with the impugned order and prayed to dismiss thc revision. 7 . Perusal of the ir-r-rpugned orcler wo uld show that there are no details as to service of notice on the petitioner and other guarantors. In the impugned order, it is menLioned that respondent Nos.3, 4 and 5 did not receive notice, and thus, notice was issuecl by way o{ paper publication in 'Prajapaksham' Telugu Daily newspaper and even after paper publication, the opponents failed to apPear Ssf61g thg lttcl respondent. However, no material is placed on recotd to show that 'Prajapaksham' newspaper has wide circulation and therefore, it cannot be said that publication of notice in the said paper is proper service Further, respondent No.2 has not recorded reasons for his conclusions and there is no consideration of merits of case and thus, the impugned order is not a reasoned order. It is settled principle of law that an order without reasons ancl without application of mind is non-est 4

8. In a catena of judgmcnts, ti-re Hon'ble Apl.:r Court and valious High Corrrts I-reltl that any orcler passed by a Col rl: or a quasi-judicial authority or a Tribunal shall recorcl reasons for its crtrrclusions

9. Ir Kranti Associates o. Masood Ahnrcd k'haut. the I lon'ble Suprerne Court, after considering varl0us jucl1lrnents, formulated certain plinciples which are set out below:- "(a) In India the juclicial trend has allvar.s .rt,cn to record re.tsorls, even in administrative clecisions, il ;uch clecisitrns affec t anyone prejudicially. (b) A quasi-judicial authority rnust rcco tl reasoru in su :port of its conclusions. (c) Insistence on recordirrg of reasons is mt:rtr: to scn,e the wiCer principle of justice that justice must not oniy be done it must also appear to be done as well. (d) Recording of reasons also opcrates as a i,,,rlitl restraint ou anv possible arbitrarv cxercise of jurlicial an( (lu as i-iuclicial or even aclministrative power. (e) Rcasons reassurc that cliscrction has bcc r ,-:xerciscd by the decision maker on relevant grounds and b., tlisregarding exl raneous considerations. (f) Reasons l.rave virtually becorne as in.lispensable a colnponent of a decision rnaking process iis observing principles of natural justice by judicial, quasi-jtt icial and cven by administrative bodies. (g) Rcasors facilitatc the process of juc{ic:al revicw by superior courts. (h) The ongoing judiciat trcnd in all countries c,:mmitted to rul: of law and constitutior-ral govcrnance is in favour of reasoned decisions baseci on relevant facts. l'h s is virtually 1(2olo) 9 scc 496 a.' 5 the life blood of judicial decision-making justifying the principle that reason is the soul of justice. (i) |udicial or even quasi-judicial opinions these days can be as different as the judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants'faith in the fustice delivery system. 0 Insistence on reason is a requirement for both judicial accountability and transparency. (k) If a judge or a quasi-judicial authority is not candid enough about his/her decision-making process then it is impossible to know whether the person deciding is faithful to the dockine of precedent or to principles of incrementalism. (l) Reasons in support of decisions must be cogent, clear and succinct. A pretencc of reasons or 'rubber-stamp reasons' is not to be equated with a valid decision-making process. (m) It cannot be doubted that lransparency is the sine qua non of restraint on abuse of iudicial powers. Transparency in decision-making not only makes the judges and decision makers less prone to errors but also makes them subject to broader scrutiny (See David Shapiro in Defence of Judicial Candor (1987) 1,00 Harvard Law Review 737-737) ; (n) Since the requirement to record reasons emanates from the broad doctrine of fairness in decision-making, the said requirement is now virtually a component of human rights ald was considered part of Strasbourg Jurisprudence. See Ruiz Torija v. Spain (7994) 19 EHRR 553 at 562 para 29 and Anya v. University of Oxford [2001] EWCA Civ 405, wherein the court referred to article 6 of European Convention of Human Rights which requires, 'adequate and intelligent reasons must be given for judicial decision.' (o) In all corrrnon law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of 'due process'." ./ ./ i a d ,1 l' I l 6 Follc,wing the principles laid down by the I Ion,ble Supreme Court in Kranti Associates (one cited supra), the Hrl:rr Court of Gujarat in Aggarzoal Dyeing anil printing Works Vs. Stale of Guiarat anil o lhersz observed as u nder:- "At the outset, we notice that it is settled leg: I oosition of law that reasons are he;irt and soul of the ortler and non comtnunication of same itself amounts to denial r,[ reasonable oppr)rtunity of hearing, resulting in miscarriage o1 jr,rstice. This cour: is bound by the said judgments hereinaJter r,eferrecl to. The necessity of giving reason by a bod1, or :ruthority in supporl of its decision came for consideratior hefore the Supreme Court in several cases. Initially, the Sutrr,:rmc Court recoggrized a sort of demarcation behveen acJ;n inistrative orders and quasi- judicial orders but n ith the pas:;a.ge of time the distinction between the two got blurred and rhinned oui and virtually reached a vanishing point in the judllment of the Suprr:me Court in A. K. Kralpak v. Union of Inlia (1970) 7 SCR .15. The honourable Supreme Court vide judg,-,-r,:.ris i., ihe cases of Ravi Yashwant Bhoir v. District Colle:,tor Raigad (2012\ 4 SCC 402, Sant Lal Gupta v. Modern ,.ioopcralve Group Housing Society Limited (2010) 13 SCC ]16; Kranti Asso<:iates Private T_imited v. Masood Ahmed KlLan (2010) 9 SCC ,t96 and Abdul GhaJfar v. Srate of Bihar (2008 r 3 SaC 258, has erpanded the horizon of natural justice and rr:asons have been Lreated part of the natural jusiice. It has ilcne to the exteni in holding that reasons are heart and soul oI the orcler.,, 10. Thus, the position of law that emerges fi,:rr1 gl" decision mentioned above is that assignment of reasons is imperative in nafure and the speaking order dockine mandates assigning tlLe reason which is the heart ancl soul of the decision. ' 2022 SCC Online Guj 2530 7 11,. In the light of the ludgment of the Hon'ble Supreme Court in Kranti Associates (wpra) and the judgment of the High Court of Gujarat in Aggantal Dyeing anil Pitting Works (supra), it has to be held that the reasons, which are the heart and soul of the order, are obviously missing in the impugned order. Therefore, the impugned order dated 13.71,.2020 is unsustainable in the eye of law.

12. In the light of the aforesaid discussion, the impugned order is liable to be set aside "13. In the result, the Civil Revision Petition is allowed and the impugned order dated 13.11..2020 passed by the respondent No.2 is set aside. Matter is remanded back to respondent No.2 with a direction to dispose of the arbitration case a fresh strictly in accordance with law, within a period of two months from the date of receipt of the order. The petitioner shall cooperate for early disposal of the arbitration case without seeking adjournments on flimsy grounds. There shall be no order as to costs. Pending miscellaneous applications if any shall stand closed. //TRUE COPY// SD/. M.OSMAN ALI BAIG SI TANT REGISTRAR s CTION OFFICER I To,

1. The Deputy Registrar of Chits Warangal district at Warangal 2. One CC to SRt. K VENUMADHAV Ad_v_ocate [OpUCl L _rEt_trffitfBs'=y ,/ 't3r.:r: ,al _a

3. One CC tcr SRl. N AMARNATH, Advocate [OPUC] 4. Two CD Copies I TUgh \ t t I li stP zffi I 1' ",, 1 t' HIGH COURT DATED:1710612C25 \ \ ORDER CRP.No.478 ol 2024 DISPOSING OF THE C.R.P. 1 laK \